Beginners question, confused between real bank accounts and gnucash accounts

DaveC49 davidcousens at bigpond.com
Thu Mar 31 01:34:21 EDT 2016


Hi Larry,

I think you will find that Gnucash can accommodate your desires . The new
account process allows you to define an account as a top level account. You
have to specify an account type( Asset, Liability,Equity etc) for this new
top level account. You could then create any structure you require under
this. The reservation may be that the relationships between the generally
used account types which is implemented by GnuCash and the business logic
which applies to A/R and A/P type accounts may not apply correctly  to sub
accounts of different classes under a top level account which is of a
specific type (e.g.  Asset for example). This is something you would have to
test and check ( I have not so far but I have briefly tested the ability to
create the structure). The interaction of reports with the account structure
may also be affected by creating what is essentially a multiple entity
structure in a single file but if you wish to create and define your own
reports, that may be circumventable. It is fairly easy to set up a test
business with two or more entities with their own account structures and
test whether transactions are handled correctly if you want to try it.

This sort of situation does arise in business for multiple companies which
may be the children of a parent holding company but the general approach
there is to maintain separate books (file) for each company and then to
consolidate the summary accounting information for each entity into a parent
file. I presume you are really thinking of individual investments rather
than separate business entities. 

Maybe one of the developers will be able to tell us if GnuCash is designed
to be able to work with multiple entities with their own accounts
substructure in a single file.

Cheers

David Cousens

Most reporting authorities and most internal business practices require a
balance sheet to have the structure reflected by the top level header
structure supplied by default in GnuCash and this structure is in accordance
with international accounting standards which are increasingly being adopted
and adapted by many countries worldwide. Maybe reading some introductory
accounting books to understand the conceptual basis of double entry
accounting which is the fundamental basis of GnuCash may help in
understanding the basic structure of the accounts



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